Fubon Financial looks to duplicate success in China

By Crystal Hsu / Staff reporter

Thu, Aug 15, 2013 - Page 13

Fubon Financial Holding Co (富邦金控), the nation’s second-largest financial service provider by assets, is hoping to leverage its success in Taiwan to build a similar financial conglomerate in China, senior executives said yesterday.

“We plan to duplicate the local business model when expanding in China,” Fubon Financial president Victor Kung (龔天行) told an investors’ conference.

Toward that end, Fubon Financial is set to complete the integration of China’s First Sino Bank (華一銀行) later this quarter with funds raised last month from the issuance of global depositary receipts, Kung said.

The purchase of an 80 percent stake in First Sino Bank will give Fubon Financial 14 banking branches and outlets in first-tier Chinese cities in the Pearl River Delta, the Yangtze River Delta and the Bohai Economic Rim.

Fubon Financial also owns a 20 percent stake in Xiamen City Commercial Bank (廈門商銀) and a non-life insurance company in the city in China’s Fujian Province.

Furthermore, the company has inked a pact to partner with Fujian Investment & Development Group (福建省投資開發集團) in setting up a securities house where Fubon Financial would have a 51 percent controlling stake, Kung said.

The company would set up the joint venture once the legislature approves the cross-strait service trade agreement, he said.

Fubon Financial is also working on setting up a life insurance company in China, Kung said.

For the first half of the year, Fubon Financial posted NT$17.89 billion (US$595.99 million) in net income, an increase of 65.1 percent from the same period last year, according to the company’s financial report.

That translates into earnings per share (EPS) of NT$1.88, lifting its return on equity to 12.17 percent and return on assets to 0.85 percent, the report showed.

The conglomerate will book another NT$9.99 billion in dividend income in the second half, after booking NT$460 million in June, the report said.

The group’s banking arm, Taipei Fubon Commercial Bank (台北富邦銀行), generated NT$8.58 billion in net profit during the January-to-June period, up 20.1 percent from last year, thanks in part to gains from the disposal of its shares in two US credit card giants, Visa Inc and MasterCard Inc, the report said.

Fubon Life Insurance Co (富邦人壽) recorded NT$9.15 billion in net profit for the first six months, growing nearly six times from a year ago due to product adjustments, the report said.

As of July, first-year premiums totaled NT$110.33 billion, making Fubon Life the best performer in the industry, the report said.